Africa

Yawning deficits and labor turmoil have made South Africa's economy vulnerable to capital flight as investors pull back from risky markets, the country's central bank said Thursday. "The current-account deficit could pose a marked risk to the stability of the domestic financial system," the South African Reserve Bank said in its semiannual review of the country's financial stability, The Wall Street Journal reported.
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For a bunch of people who just agreed the global economy is doing better, top officials from the world's rich and poor nations sound rather worried. For poor nations, the easy monetary policies in advanced economies are leading to big swings in capital flows that could destabilize emerging markets. For rich countries, the hoarding of currency by developing nations is blocking progress toward a more stable global economy.
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Nigeria's president, Goodluck Jonathan, has suspended the head of its central bank, removing an increasingly outspoken critic of the government's record on tackling rampant corruption, The Guardian reported. Lamido Sanusi, who was due to end his term as governor in June, had been presenting evidence to parliament he said showed the state oil company Nigeria National Petroleum Corporation (NNPC) failed to pay $20bn (£12bn) it owed to the government. The company has repeatedly denied his allegations.
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Julius Malema, the leader of a party that advocates nationalizing South Africa’s mines and banks, was provisionally declared insolvent, a ruling that may prevent him from being elected to Parliament, Bloomberg News reported. The North Gauteng High Court issued the ruling today, Adrian Lackay, a spokesman for the South African Revenue Service, said by phone from Pretoria, the capital. “He has the opportunity to contest the sequestration order before it is made final on May 26,” he said.
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Uganda Gets IMF OK to Raise Debt Limit

The International Monetary Fund has cleared Uganda to increase its debt ceiling on non-concessional borrowing by up to 47%, to allow the East African nation to fund ambitious hydroelectric projects aimed at addressing chronic power shortages, The Wall Street Journal reported. The country's borrowing limit has been increased to $2.2 billion from $1.5 billion, a boost for the country's efforts to access funds to meet its widening budget deficit, Ana Lucia Coronel, the IMF's senior resident representative in Uganda, said Monday.
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Nzoia Sugar Company has denied a report by the Auditor General last week that indicated that it is technically insolvent and operating on a negative working capital, allAfrica.com reported. The company is reported to have debts amounting to Sh16billion hence making it hard to even meet its basic financial obligations. The second largest sugar milling company however said the report presented to Parliament's Public Investments Committee, did not include all the required records especially the cash books while carrying out the forensic audit.
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Pensioners in developed economies are no longer being spared the worst effects of the financial crisis as fiscal austerity programmes aimed at curtailing spending on the elderly start to kick in, the OECD has warned, the Financial Times reported. Spending on pensions, which accounts for nearly a fifth of government outlays on average across the 34-nation Organisation for Economic Co-operation and Development, is being limited through a variety of benefit changes including raising state retirement ages and freezing – or even cutting – payouts.
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South African Finance Minister Pravin Gordhan will struggle to keep government debt under control even as he pledges to stick to spending targets, Bloomberg reported. Gross debt will climb to 48 percent of gross domestic product in the year through March 2017 from an estimated 43 percent last year, the National Treasury said in its mid-term budget report released in Cape Town today. That’s mainly due to rising debt costs and tax receipts falling short of targets.
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G20 Backs Crackdown On Tax Avoidance

Leaders of the world’s largest economies ratcheted up the pressure on tax avoidance by backing “an ambitious and comprehensive” plan to crack down on multinationals that shift profits into low-tax countries, the Irish Times reported. The G20 countries also stepped up the assault on evasion, with plans to exchange tax information automatically between themselves by the end of 2015 and calling “on all other jurisdictions to join us by the earliest possible date”.
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Banks Face New Set Of Capital Rules

Banks face being hit with a new set of international capital rules aimed at forcing bondholders rather than taxpayers to bail out failing institutions, the Financial Times reported. Global regulators are seeking support from world leaders to draw up proposals to force banks to hold a minimum amount of debt that can be “bailed in” if a bank collapses.
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